Trump Attempts to Remove Fed Governor Lisa Cook, Igniting Legal Controversy
August 26, 2025 — In a bold and unprecedented move, President Donald Trump announced the immediate removal of Federal Reserve Governor Lisa Cook, escalating a long-standing showdown between the White House and the central bank over its direction and independence.
Mortgage Fraud Allegations Spark Dismissal
Trump cited allegations that Cook submitted conflicting mortgage applications—claiming two primary residences in 2021—to justify his decision. In a letter posted online, he argued that this constituted sufficient cause for dismissal, asserting his constitutional authority to act.
Cook Refuses to Resign
Governor Cook swiftly rejected the termination, calling it illegal. "President Trump purported to fire me ‘for cause’ when no cause exists under the law,” she stated, vowing to continue her term and challenge the action in court.
Her attorney, Abbe David Lowell, echoed that sentiment—labelling the firing “flawed,” lacking due process, and preparing for legal opposition.
Legal Experts Sound Alarm
Legal observers emphasized that dismissing a Fed governor without just cause defies long-established legal protections. Columbia law professor Lev Menand called the act “procedurally invalid,” noting that ‘for cause’ typically requires on-duty misconduct—not private matters.
Markets React with Unease
Investors responded with concern as global financial markets slipped, particularly in Asia. Bond yields shifted dramatically, and confidence in the central bank's autonomy took a hit
A Historic Breach of Fed Independence
This marks the first attempted direct removal of a Federal Reserve governor—a significant challenge to the institution’s decades-long independence. Analysts warn that if Cook's removal is upheld, Trump could reshape the Fed to favor his policy priorities.